Who’s Next?

Back in 2009, I wrote an article in which I lamented retailers’ then-current obsession with clutter clearing and other “retail rehab” measures. I questioned whether they would have achieved their ideal once the majority of their stores were remodeled, cleaned up, and optimized, or whether their customers would simply let out a collective “meh.”

In my last article for LIMA, I wrote about the leap forward that many major retailers have taken, and how they have finally begun to move from a defensive position to an offensive one in the fight for connected customer engagement. A recent wave of high-level hiring and reorganization promises to accelerate this process, foreshadowing what the connected retail organizations of the future will look like. In a major departure from the past, retailers aren’t just layering fresh talent onto conventional configurations, but are purging legacy players, re-jiggering traditional reporting structures and, in some cases, leaving top posts vacant for extended periods of time until the right people come along.

Breaking the Mold
J.C. Penney’s June announcement that former Apple retail chief, Ron Johnson, will take over as its new CEO has retail pundits pondering whether he will reinvent the department store as we know it. A more immediate possibility is that the more-than-a-century-old company will reinvent its entire leadership structure. Since the Johnson announcement, longtime Penney CMO Mike Boylson has gone into early retirement, while the company has extended advanced retirement offers to an undisclosed number of additional headquarters employees. Candidates for the program must be over 55, have more than 20 years of employment experience, and be participants in the company’s pension program. While this is being touted as a cost-cutting measure, Penney is clearly seeking to transform its personnel prototype. The company’s corporate address on Legacy Drive could soon become something of an inside joke to suppliers who call on the account.

Vast Vacancies
Sears Holdings Corp has tested the limits of executive-level absence in retail ever since hedge fund manager Eddie Lampert took over in 2005. This month, the company announced the appointment of Monica Woo as VP and Chief Marketing Officer, a post that had remained vacant since January 2010. Lou D’Ambrosio joined the company as CEO in February, ending a three-year search for a new chief executive. Ms. Woo’s background as chief marketing and strategy officer of U.S. online grocer FreshDirect and Mr. D’Ambrosio’s previous stints at Avaya and IBM are additional indicators of retailers’ new-found penchant for techy types. In the interim, Sears resisted any pull toward homegrown solutions.

From site-to-store to site-reports-to-store
Just last week, Walmart announced a major reorganization of its global e-commerce operations, which will see e-commerce managers in the U.S., U.K., Japan, and Canada reporting directly to store executives, rather than to its global e-commerce team. Walmart’s California-based global e-commerce unit was just created in 2010, with Eduardo Castro-Wright appointed to head it up after being replaced as president of the U.S. store business. In effect, Mr. Castro-Wright left the Bentonville-based stores unit for online, only to have online report back to the stores. Two e-commerce executives departed in the wake of the realignment: Raul Vasquez, who had been in charge of developed markets, and Steve Nave, who oversaw Walmart.com. In the wake of the shift, Walmart.com may finally evolve from a set-apart anomaly to a synergistic unit whose site-to-store scale puts something over on Amazon.

Retailer organizations are starting to look as shiny as the gadgets they’re selling to shoppers. Are you ready for the change?

Bottom line:

Even generations-old retailers are slaying organizational sacred cows in their quest to connect the dots with consumers. Licensors and licensees who want to stay top-of-mind with retailers will have to do the same.

Many licensors and licensees have done a great job in cultivating high-level retailer relationships. With retailers reevaluating those positions and, in some cases, waiting longer to fill them once they have been transitioned, proactively developing supporting contacts will be critical to program continuity.

The days of online and offline operating as separate channels are coming to a close. The time has come to tear down sales silos and approach opportunities synergistically.

I look forward to seeing you at LIMA’s upcoming Retail and Branding Conference in New York on September 13th, where I will join executives from HSN, Sears Holdings, and Iconix Brand Group to explore these and other retail touch point transformations. Attendance is limited so register now!